ASO: an organization that provides outsourced solutions to meet the administrative and HR needs of the client, with the client retaining all employment-related risks and liabilities. The term ASO was established by the PEO industry in the late 1990s in order to distinguish between selective administrative support and full-scale PEO services.The principal difference between the two types of service is that, in an ASO arrangement, the employer remains the employer of record for tax purposes. Ultimately, with this structure, tax and insurance filings are done through the administrative firm, but under the client company’s employer identification number. All W-2 and workers’ compensation policies remain the responsibility of the employer and not the administrative firm
Crime insurance: A form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
Commercial/Business Automobile: Provides coverage for all vehicles under the company’s course of carrying out its business: cars, trucks, vans, etc. Coverage may include vehicles owned or leased by the company, hired by the company, or employee-owned vehicles used for business purposes. You may have heard of this coverage referred to as commercial auto insurance, commercial car insurance, truck insurance, or fleet insurance. Just like your personal auto policy, business auto insurance provides similar coverages – liability, collision, comprehensive, medical payments (or personal injury protection) and uninsured motorist coverage.
Cyber Liability Insurance: an insurance product used to protect businesses against damages resulting from electronic threats to your computer systems or data. Risks of this nature are typically excluded from traditional commercial general liability policies or at least are not specifically defined in traditional insurance products. Coverage may include first-party coverage against losses such as data destruction, extortion, theft, hacking, and denial of service attacks; liability coverage indemnifying companies for losses to others caused, for example, by errors and omissions, failure to safeguard data, or defamation; and other benefits including regular security-audit, post-incident public relations and investigative expenses, and criminal reward funds.
EPLI: Employment Practices & Liability Insurance – covers lawsuit expenses when an employee sues over discrimination, harassment, wrongful termination, and similar issues. It also protects your company, its directors, officers, and employees from claims brought by past or present employees. This coverage can be provided as a separate policy or as an endorsement to a general liability or business owners policy or in conjunction with a directors and officers liability policy.
Employee Benefits Liability: Covers legal liability that the insured incurs in administering the company employee benefits programs. This may include failing to enroll, maintain or terminate employees in a plan, and failing to correctly describe benefit plans and eligibility rules to employees. It is a “claims-made” policy, which means it only covers claims made during the coverage period and usually offered as an add-on or endorsement to a commercial general liability insurance policy.
Experience Modifier: Also called an XMod – it is an adjustment of an employer’s premium for worker’s compensation coverage based on the losses the insurer has experienced from that employer. Experience modifiers are normally recalculated for an employer annually by using experience ratings. The rating is a method used by insurers to determine pricing of premiums for different groups or individuals based on the group or individual’s history of claims. The XMod adjusts workers compensation insurance premiums for a particular employer based on a comparison of past losses of that employer to what is calculated to be “average” losses of other employers in that state in the same business, adjusted for size.
General Liability: Typically covers you and your company for claims involving bodily injuries and property damage resulting from your products, services or operations and any claims arising from advertising and personal injury. It does NOT cover employee injuries, auto accidents, workmanship or professional mistakes.
Professional Liability: Also known as errors & omissions (E&O). A form of liability insurance which helps protect individuals and companies who provide professional advice and service from bearing the full cost of defending against a negligence claim made by a client. Undelivered services, accusations of negligence, malpractice, and oversights (i.e. accounting) would all be covered with the proper professional liability policy.
HRA: a health reimbursement agreement a type of US employer-funded health benefit plan that reimburses employees for out-of-pocket medical expenses and, in limited cases, to pay for health insurance plan premiums. The employer sets aside a specific amount of pre-tax dollars for the employees whom use the money towards annual health care expenses. It must be solely funded by the employer and cannot be funded by employee salary reduction. Employers can establish what the funds are allocated for – from all health-care related expenditures to only emergency rooms costs. Most importantly, all employer contributions to the plan are 100% tax deductible to the employer, and tax-free to the employee.
HSA: A tax-advantaged savings account designed to help you pay for out-of-pocket medical expenses when you have a high-deductible health plan. Your HSA dollars can be used to help pay the health insurance deductible and qualified medical expenses, including those not covered by the health insurance, like dental and vision care. To be eligible to establish an HSA with a high deductible health insurance plan you must be self-employed, responsible for purchasing your own health insurance plan or work for an employer who offers HSAs as an option.
Human Resources: This department typically deals with overseeing various aspects of employment, such as compliance with labor law and employment standards, administration of employee benefits, organizing of employees files with the required documents for future reference, some aspects of recruitment.
Inland Marine: Used to provide protection for assets and property that is movable or could be in transit over land as well as property owned by others that is in the possession of the policyholder or on the policyholder’s premises. You may want to consider inland marine insurance if you own a business that ships or transports products or equipment. This type of coverage may be purchased as an add-on to an existing business insurance policy, or it may be available as a separate policy.
HMO: Medical insurance group that provides health services for a fixed annual fee. It is an organization that provides or arranges managed care for health insurance, self-funded health care benefit plans, individuals, and other entities, acting as a liaison with health care providers (hospitals, doctors, etc.) on a prepaid basis.
Pay-As-You-Go: See Pay-Go-Comp
Named Perils: Require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion, and theft.
Open Perils: Cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war.
Pay-Go-Comp: Allows you to make premium payments each time you run payroll, not stipulated monthly payments. Your workers’ comp insurance liability is spread out throughout the year and paid as you need it. Traditional workers’ comp plans require large lump sum payments to cover the estimated cost of your liability. Pay-go-comp allows you to streamline cash flow by only paying for the premiums you actually need, rather than mis-calculated estimated resulting in year-end audits.
Payroll Administration: Companies who chose to outsource their payroll administration, can normally reduce the costs involved in having payroll trained employees in-house as well as the costs of systems and software needed to process a payroll. They also assist with paying the employer’s share of payroll taxes, for depositing tax withheld from the employees’ paychecks, preparing various reconciliation reports, accounting for the payroll expense through their financial reporting, and filing payroll tax returns.
PEO: A professional employer organization is an outsourcing firm which provides services to small and medium sized businesses (SMBs). Typically, the PEO offering may include human resource consulting, safety and risk mitigation services, payroll processing, employer payroll tax filing, workers’ compensation insurance, health benefits, employers’ practice and liability insurance (EPLI), retirement vehicles (401(k)), regulatory compliance assistance, workforce management technology, and training and development. The PEO enters into a contractual co-employment agreement with its clientele. Through co-employment, the PEO becomes the employer of record for tax purposes through filing payroll taxes under its own tax identification numbers.
PPO: Sometimes referred to as a participating provider organization or preferred provider option, is a managed care organization of medical doctors, hospitals, and other health care providers who have agreed with an insurer or a third-party administrator to provide health care at reduced rates to the top insurer’s or administrator’s clients. PPO plans do not require you to choose a primary care physician (PCP) and do not require referrals. It offers you the freedom to receive care from any provider—in or out of your network.
Property Insurance: Provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or boiler insurance. Property is insured in two main ways—open perils and named perils.
Safety and Compliance: Regulated by safety compliance companies or organizations, as well as government legislation, and is monitored and enforced by these bodies to ensure compliance with the established standards. Businesses or companies in all industries must comply with safety regulations that are relevant to their industry.
Staffing: Services in temporary staffing, temporary-to-hire staffing, contract staffing, direct placement. Involves obtaining, utilizing and retaining, qualified and competent personnel to fill all positions of an organization
Workers’ compensation: A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment. The laws provide employees with monetary awards to cover loss of wages directly related to the accident as well as to compensate for permanent physical impairments and medical expenses. Also provides benefits for dependents of those workers who are killed in work-related accidents or illnesses. Some laws also protect employers and fellow workers by limiting the amount an injured employee can recover from an employer and by eliminating the liability of co-workers in most accidents.
XMod: See Experience Modifier